DLP Insights

Dismissal prohibition: dismissal of several executives is null and void

Categories: DLP Insights, Case Law | Tag: Dismissal, Covid-19

27 Jul 2021

In a 2 July 2021 order, The Court of Milan ruled that, dismissals announced by the same company to six executives, in the same period and based on the same objective reasons, were part of the collective redundancies subject to the prohibition during the pandemic. The Court held that it was irrelevant that four of the six dismissals had been revoked, the employment relationship reinstated and subsequently terminated by mutual consent.

Facts of the case

In February 2021, a company in liquidation dismissed an executive for objective justified reasons on the grounds of an alleged reduction in business activity and turnover and  the termination of his position. The executive challenged the dismissal in Court, pointing out that, within about six weeks and based on the same objective grounds, the company had dismissed five other executives, implying that his dismissal was covered by the collective dismissals referred to in Articles  4, 5 and 24 of Law no.  223/1991, prohibited by the emergency Covid-19 legislation.

The company, which appeared in Court, pointed out that during that period, there had been two dismissals and not six, since four of the six executive employment relationships had ended consensually and against a financial incentive (the notice of dismissal had been followed by a revocation, reinstatement of the relationship and consensual termination).

The Court’s decision

The Court upheld the executive’s appeal, holding that the subsequent revocation of four of the six dismissals was irrelevant and could not prevent the case from being one of collective redundancy since the wording of Art. 24 of Italian Law no. 223/1991 leaves no room for any other interpretation.

Under the above law, an employer who employs more than 15 employees and intends to make at least five redundancies within 120 days because of a reduction or transformation of business or work, must comply with the procedures laid down by the same law. Therefore, for collective redundancy definition purposes, it is irrelevant if the number of employees dismissed is lower. 

In this case, in the Court’s view, the numerical requirement under the law had been met upstream when the company had made six redundancies within about six weeks, openly expressing its intention to terminate the employment relationship.

Having ascertained the existence of collective dismissal, the Court found that the executive’s employment termination was null and void for breach of the rules on the collective dismissal prohibition laid down in Art. 46 of Decree Law no. 18/2020 and repeatedly extended “whose imperative nature and public order reasons cannot be doubted”. The Court ordered the company to reinstate the executive in his job and pay him compensation.

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